The National Association of Manufacturers (NAM) sent a letter (10/28/13) to Congress about the upcoming budget conference. NAM comments on various budget related topics including tax reform and entitlement problems. Regarding tax reform, NAM suggests that tax reform include:

1. 25% corporate rate

2. Lower taxes for S corp owners

3. Permanent and competitive research incentive

4. Competitive international system

5. A “robust capital recovery system to spur business investment and expansion in the United States.”

Observations:

While they specify a rate for corporate tax, they don’t for S corp shareholders. Does that mean they don’t think it should be as low as 25% or perhaps it can’t be in a revenue neutral manner? They might also be recognizing that not all passthrough entities have lots of income (and thus might already be taxed at rates well below the maximum rate of 39.6%) and are really more focused on publicly-traded corporations. Read More